How can you protect your inheritance from divorce?

An inheritance was given to you, and your parents didn't intend for their money to leave your family if you got a divorce. What can you do to protect those assets?

In some cases, they're already protected. Courts often look at this money as separate property and not marital property. If you set the money aside, you may simply be able to claim that it's still yours alone.

That said, when assets get commingled, they can lose the inherent protections. The best way to protect the inheritance is to keep it in its own bank account, keeping it as far as possible from your spouse. Don't put it anywhere that you both have access. Don't use it for joint costs, like paying off the mortgage or fixing up a house you own together. When you both have access to the money, it opens the door to allow your spouse to claim he or she has equal rights to that money.

Another way to protect it, if you received the inheritance before you got married, is just to put it in a prenuptial agreement. This agreement can list the exact amount of money that was passed down and specify that that much money must return to you in the event of a divorce. Then, even if the money is kept in a joint bank account, it's still clearly separated from money belonging to your spouse.

The key is to be proactive about protecting your money. Don't assume that it's yours alone no matter what. Understand your legal options and what steps you must take to ensure your personal property isn't lost when your marriage breaks up.

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